Auto Loans

How to Get an Instant Auto Loan

Getting an instant auto loan may seem difficult. You may find yourself in a situation where you need to get approved for a car loan quickly. Maybe your car broke down and needs to be replaced immediately, or maybe you’ve just accepted a job offer where public transportation is not an option. Perhaps you have come across your dream car and can’t wait for it to become yours.

Whatever the reason, you may be able to get an instant auto loan and expedite the auto financing process, which typically can take hours, or even days. Here’s how to get an instant auto loan with less hassle.

What is a same-day or instant auto loan?

A same-day or instant auto loan is a loan that can be approved in less than an hour, as long as you meet certain criteria. Since instant car loan companies come with different requirements and interest rates, it’s important to comparison shop before deciding on which company to go with for your instant auto loan.

Bank of America, Wells Fargo, Chase and U.S. Bank are some banks that offer instant auto loans. If you bank at a credit union, you can also check there to find out whether same-day auto loans are available. In addition, you may be able to obtain an instant auto loan through an online lender.

In some cases, instant car loan companies will want to know exactly which car you’re interested in. In other cases, you’ll simply get approved for a certain amount. It will depend on the company you decide to go with for your instant auto loan. If you’re shopping for a used vehicle, you’ll likely be required to provide the lender with the age of the vehicle, mileage and any history of accidents.

If you opt for traditional auto financing at a dealership, you can expect the process to take at least an hour or two. It may take even longer if you don’t have proper car loan documentation or meet certain criteria. The process moves slower at dealerships because you’ll need to get preapproved, fill out documentation and listen to sales pitches about add-on products such as extended warranties. This can take a great deal of time, especially if you’re at the dealership on a particularly busy day.

With an instant auto loan, you can significantly shorten the process and get approved in less than an hour as long as you have all of your documentation and information ready to go up front. Bank of America states that it makes most instant car loan decisions in about 60 seconds. Navy Federal Credit Union advertises that its instant car loan decisions are made in five minutes or less. Once you get approved for an instant auto loan, you can go to the dealership and finalize the deal with a check.

If you’re unsure of the amount of money you need to borrow, many lenders will provide you with a blank check so you can write up to a certain amount. The amount you write once you get to the dealership will be the amount of your loan and what you’ll need to pay back along with interest.

Why would you want to get an instant auto loan?

As with all financial products, instant auto loans come with several benefits and drawbacks. Let’s dive deeper into what they are.

Pros

  • Negotiating power: If you get an instant auto loan, you’ll have more leverage to negotiate an even better rate with the dealer’s preferred lenders. You’ll know what kinds of rates you should be able to get so it’ll be easier to determine if a dealer is offering you a marked up rate.
  • Saving time: By getting an instant auto loan, you can shorten the auto financing process and drive away in your new (or used) car quickly.
  • An affordable car loan: An instant auto loan can give you the chance to find out what you can comfortably afford before going to the dealership, reducing the risk of the dealer upselling you to a more expensive vehicle.

Cons

  • Can be difficult to obtain with bad credit: If you have less-than-stellar credit, an instant auto loan may be more challenging to get. You may need to provide more documentation than someone with good credit which could slow down the process.
  • Some instant car loan company are scams: Unfortunately, there are some companies out there that claim to be legitimate and offer quick car loans but are actually fraudulent. Be sure to check the legitimacy of a company before giving out your personal information. Upfront fees, an insecure website and no credit check are all red flags that may indicate a company is trying to scam you.
  • A hard credit check is run: Every time you apply for an instant auto loan, the lender will run a hard credit check, which has the potential to lower your credit score. However, it doesn’t hurt your credit to apply to multiple lenders any more than it does to apply to one if you do all your applications within 14 days.

How to get a same-day auto loan if you have good credit

Getting a same-day auto loan should be easy if you have a FICO score in the 670 to 799 ranges. This range is considered to be good-to-very good credit.

If you have good credit, you’ll need to provide an ID such as your driver’s license or passport, proof of income, proof of residence and vehicle information including year, make, model, and mileage. In the event you’re trading in a vehicle, loan information or a title will be required as well.

Keep in mind that if you have good credit, you have the power to find competitive offers from multiple lenders. Don’t be afraid to let lenders know that you’re shopping around and on a mission to find the best deal.

How to get a same-day auto loan if you have bad credit

Although getting a same-day auto loan with bad credit can be difficult, it is possible. If you have a FICO score of less than 650, you may have to deal with high interest rates. According to Edmunds, as of April 2019, the average APR for new cars is 6.28% and 8.83% for used cars. Unfortunately, your APR will likely be much higher if you don’t have the best credit. For example, if your credit score is anywhere between 501 and 600, you can pay an average 11.35% APR for a new car loan and average 16.92% APR for a used car loan.

While you may have to accept a higher interest rate than you’d like, there are several ways you can increase your chances of getting approved for a same-day auto loan. You can consider a less expensive vehicle, put down a  hefty down payment, and/or provide additional documentation like your utility bills or cell phone bills that display your name and show you have a history of making payments on time.

You’ll need to bring along the same documentation that you would if you had good credit in order to apply for the instant auto loan. You’ll need to provide an ID such as your driver’s license or passport, proof of income, proof of residence and vehicle information. Details on your loan or your title will also be necessary if you’re planning on trading in a vehicle.

5 steps to get a good deal on an instant auto loan

There are a number of ways you can get a good deal on an instant auto loan. Here are five tips that can help.

1. Review your credit report

Before applying for an instant auto loan, review your credit report. If you find any errors or fraud, be sure to go through the process of correcting them. While this may take time, it can help you land more favorable terms on an instant auto loan.

2. Get the fair market price of the vehicle and your trade-in

Get an idea of what the going price is for your vehicle of choice. Edmunds offers a tool that lets you configure a car and find its average market price in your area through its True Market Value or TMV tool.

Alternatively, you can check out a site like Kelley Blue Book to find out what a fair price might be for your chosen car and discover what a trade-in might be worth.

3. Aim for an APR below 5%

According to Ronald Montoya, senior consumer advice editor at Edmunds, any APR below 5% is considered really good on a car loan. If you have excellent credit, you may be able to land an APR as low as 1.9%. In the event you don’t have the best credit, you may have to settle for a higher APR.

4. Compare offers

Rather than going with the first instant auto loan company you find, take the time to compare offers. Once you’ve received responses from multiple lenders, review them and determine the best deal. Be sure to consider additional charges and fees instead of only paying attention to the interest rate. Compare them to dealership and manufacturer offers as well.

5. Visit the manufacturer’s website

According to Montoya, if you have a credit score between 661 and 790, it may be worth your time to visit the auto manufacturer’s website. Many manufacturers offer low interest rates and special deals to customers who have good credit.

Shop around

Think you got a less-than-stellar deal from an instant car loan? If so, you have a few options. If you have bad credit, focus on improving your credit history and refinance your loan in a year or two to land a lower interest rate and more favorable terms.

If you have good credit, keep shopping around. Get a price quote from various instant auto loan providers and dealerships. “You don’t need to sign the paperwork out of desperation. There are other deals out there and you’ll eventually find one that’s ideal for your lifestyle and budget,” says Montoya. You could fill out a single online form on LendingTree and be matched with up to five potential auto loan offers from lenders, depending on your creditworthiness.

Alternatives to instant auto loans

A few alternatives to instant auto loans include:

Dealership loans

If you’re unable to get an instant auto loan, you may still be able to get an auto loan fairly quickly through a dealership. Dealerships have their own network of banks and you may get approved with one of them.

“You can always call the dealership in advance and ask them what information you can provide to them over the phone. This way, the paperwork can be printed out once you arrive and you can reduce the amount of time it takes to obtain a loan,” explains Montoya.

Keep in mind, however, that there are a few disadvantages of going this route. Dealership financing isn’t always transparent as dealerships are known to add unnecessary items such as extended warranties and service packages to auto loans.

In addition, you may not be able to receive the assistance you need with your loan since dealerships work with third parties that may or may not offer strong customer service.

Personal loans

Personal loans can be used for virtually anything, including buying a car. If you are unable to get a good deal on an instant auto loan, you may want to find a personal loan through a bank, credit union, or online lender. Keep in mind, however, that a personal loan may come with origination fees and prepayment penalties.

The bottom line

With an instant auto loan, you can get approved for financing and buy a car the same day. While it may save you time, give you negotiating power and increase your chances of obtaining an affordable car loan, it can be difficult to get approved for if you don’t have the best credit history. Also, not all instant auto loans are legitimate and have your best interests in mind.

By taking the time to do your research and considering all the pros and cons of an instant auto loan, you can determine whether this option is right for you.

The information in this article is accurate as of the date of publishing.

 

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